Finding 970288 (2023-001)

2023-01 Internal Control over Financial Reporting - Adjustments Condition: During the audit process, significant adjustments were made to the Organization’s financial records so as to appropriately state the financial statements in the current fiscal year. The Organization’s independent auditors may assist in the preparation of accurate financial statements and disclosures but are not considered a part of the Organization’s internal control process under audit standards. Criteria: Professional standards issued by the Auditing Standards Board. Cause: Complexities in implementing new accounting guidance for revenue recognition and leases contributed to the cause of this condition. Effect: As a result of this condition, without reliance on its external auditors, the Organization lacked the necessary internal controls over the preparation of its financial statements in accordance with generally accepted accounting principles. This condition could result in undetected and uncorrected misstatements in the financial statements that are not detected by management and may also not be detected by the financial statement audit. Recommendation: The condition, cause and effect described above, is common to similar organizations. The Organization’s financial management should continue to carefully apply accounting guidance in these emerging areas. Response: The Organization is committed to continuing to improve its financial management and accounting capacity.